Update: Broadband Prices in Context

Key Takeaways

• Analysis of data from the BLS shows that broadband price growth over the last decade has been much lower than overall consumer prices, and much lower than the growth in cost of other essential household services.
• As policymakers and others contemplate the future of the broadband sector and potential approaches to affordability concerns, they should keep in mind that the prevailing regulatory approach to this sector has yielded significant and lasting consumer benefits.
• The results of our analysis are also available in the Data section of BroadbandExpanded under Broadband Prices and will be updated as new data becomes available.

Price Trends

Internet connectivity has become an essential service for nearly every American. For those households that subscribe to a broadband service, it is also a recurring monthly expense. The affordability of those connections continues to be a hot-button topic as parties debate whether broadband prices are too high and whether it is appropriate for government to intervene to address the issue.

Considering this discussion, the ACLP used the Consumer Price Index to investigate the growth of monthly internet costs in comparison to other essential household expenses over the last several years. The growth in prices of these various costs, compared to their levels ten years ago, is summarized in the graphic below. We have also made this graphic available in the Data section of BroadbandExpanded under Broadband Prices and plan to update it periodically as new data becomes available.

Between January 2016 and September 2025:

• The cost of household internet service increased in price by approximately 11%.
• The cost of household utilities such as electricity, piped gas, and water/sewer rose approximately 46%, 61%, and 45% respectively during these years, levels drastically higher than internet service.
• Overall consumer prices increased by about 37% percent.

While the affordability of a broadband connection continues to be a barrier to adoption for some households, in the broader context of consumer price trends, the cost of internet access services has seen comparatively little increase in recent years. In “real” terms (i.e., when considering overall consumer inflation), a home internet connection has become cheaper and makes up a smaller proportion of total household expenditures than it did in the past.

Discussion of “real” prices, despite the terminology, is not immediately intuitive and sometimes invites criticism, largely from those pointing out that a typical customer is unlikely to see the price on their bill go down. Contextualizing prices in regards to overall consumer prices can help illustrate this point: it is not that dollar prices for broadband are decreasing, but that they have grown much more slowly than overall consumer prices, and thus are likely to make up a smaller proportion of a household’s total spending.

Trends in Context

Several recent analyses have also observed that broadband prices have remained static or decreased. However, none of those analyses placed this significant trend within the broader context of household expenditures on other necessities, namely electricity and gas service. As depicted in the chart above, the prices for those utility services have increased significantly over the last few years, outpacing inflation and, in a growing number of cases, leaving consumers with ever-higher monthly bills for essential services.

Comparing broadband price trends with those in the electric, gas, and water sectors is imperfect given their vastly different market dynamics and regulatory approaches, but it is instructive nonetheless for several reasons.

First, the broadband, gas, and electric markets are similar in that most customers in the U.S. purchase these services from a private entity, e.g., a private ISP like Comcast or an investor-owned utility like ConEd (this dynamic is flipped in the water sector, where most Americans receive service from a public entity).

Second, these sectors are resource-intensive and require significant ongoing capex to maintain and modernize networks. For example, in 2024, broadband capex sector-wide was approximately $90 billion. That same year, electric IOU capex eclipsed $178 billion. Electric rates typically reflect capex (among other factors), which means that, in general, the more an electric utility invests in its network, the higher its rates will be because, as a regulated monopoly, it is guaranteed to recoup those investments, plus a set rate of return. Broadband ISPs, on the other hand, vie for customers in a robustly competitive market, where competition “regulates” prices.

Third, there are some who wish to subject broadband ISPs to the same regulatory framework as electric, gas, and water utilities. Given the pricing trends depicted above, this makes little sense and could lead to broadband price increases and other consumer harms, like less innovation and fewer service options.

In sum, as policymakers and others contemplate the future of the broadband sector and potential approaches to affordability concerns, they should keep in mind that the prevailing regulatory approach to this sector has yielded significant and lasting consumer benefits.

Methodology

This graphic was generated using the Consumer Price Index from the United States Bureau of Labor Statistics (BLS). The BLS collects and analyzes data on employment, pricing and productivity in the US market. More specifically, the Consumer Price Index-Urban (CPI-U) tracks the price of goods and services included in a “market basket” for urban consumers over time and is the most common measure of inflation. Data is collected via quarterly surveys and weekly diaries from consumer households, and the ‘urban’ CPI data covers roughly 93 percent of the US population.

The datasets included in the graph are:

• Internet: Internet services and electronic information providers in U.S. city average, all urban consumers, not seasonally adjusted (CUUR0000SEEE03)
• Electricity: Electricity in U.S. city average, all urban consumers, not seasonally adjusted (CUUR0000SEHF01)
• Piped Gas: Utility (piped) gas service in U.S. city average, all urban consumers, not seasonally adjusted (CUUR0000SEHF02)
• Water & Sewer: Water and sewerage maintenance in U.S. city average, all urban consumers, not seasonally adjusted (CUUR0000SEHG01)
• Overall CPI: All items in U.S. city average, all urban consumers, not seasonally adjusted (CUUR0000SA0)